Apple Investors Ask For Clarity About AI Tariffs And Strategies Amid Decline In IPhone Sales

JAKARTA - Apple Inc. is expected to face many questions regarding the delay in launching artificial intelligence (AI) features and the impact of tariff tensions between the US and China. Especially when the Cupertino company reported its quarterly financial results on Thursday, May 1.

Even though Apple got a jump in orders for the cheaper iPhone 16e in the January 'March period ahead of a possible rate applicability, analysts at Wall Street still expect a small decline in iPhone sales. This will be the second quarter in a row Apple recorded a decline in iPhone sales.

The US government under Donald Trump previously did not impose tariffs on electronic products, but Washington has signaled the possibility of new tariffs in the next few weeks. This uncertainty saw Apple's shares drop more than 16% so far this year and removed market value of more than 600 billion US dollars.

Apple has been trying to reduce the impact of tariffs by moving iPhone production to the US market to India. Analysts expect Apple will charge some of its tariff fees to its supply chains while holding back price increases from losing market share.

Tarif is a Damocles sword for Apple hanging, disturbing, and very politically," said Eric Schiffer, Chairman of the Patriarch Organization, a private equity firm in California that owns Apple shares.

Unlike its competitors such as Samsung and Google (Alphabet), Apple is considered slow in launching the AI features promised in last year's developer conference. The increase in Siri's voice assistants was delayed until 2026, and Apple even attracted ads that display the AI capabilities that are not yet available.

The AI feature is critical in the Chinese market, where Apple continues to lose its market share to local competitors like Huawei. Apple has teamed up with Alibaba to offer AI services in China, but has yet to provide an official launch schedule.

iPhone shipments in China fell 9% in the March quarter making Apple the only major smartphone manufacturer to record a decline in the region, according to data from IDC.

However, high demand for the USD 599 iPhone 16e in India helped Apple seize the top spot in global smartphone sales during the quarter, according to Counterpoint Research.

Apple's cautious and privacy-first approach in AI development has slowed its technological rollout and the company lags behind its competitors, said Jacob Bourne, an analyst at eMarketer.

"With the threat of tariffs weighing on the cost structure, Apple faces pressure to move faster in AI innovation and rearranging supply chains of two things that both require large capital," he said.

Overall, Apple's revenue is expected to rise 4.2% in the January 'March period, in line with the previous quarter's growth rate. The growth was driven by the increasing demand for the iPad and the growth of Apple's digital service unit.

iPad sales are expected to increase 9.1% in the second quarter, while the service business is the second-largest revenue contributor after the iPhone is expected to grow 11.8%.